​Buying a home on your own is a huge commitment and one of the biggest milestones you achieve in life for most Malaysians. With the rising housing price in Malaysia, purchasing a house in Malaysia can be a financial burden. Fret not, there are many schemes available to help you to buy a house such as Rumah Pertamaku, RUMAWIP, pr1ma and so on. This article will also guide you through some tips on financial planning before you buy your first property.

How much can you afford? First of all, you will need to know exactly how much you can afford before you start searching for a house.

Financial institutions will also look into your debt service ratio (DSR) before they decide on the loan amount that you are eligible to loan. The DSR is an indicator of your income that has been spent on debt repayments, such as personal loan, auto loan or home loan. They will then based on the remaining income available to determine how much you are able to afford for the bank loan that you applied to. Your DSR along with the repayments of the loan you apply should not be more than 60% if you want to be eligible for the loan.

2. Upfront paymentMost properties would require the buyers to pay a 10% down payment for the property so the buyer will need to get a 90% loan from the bank to afford buying a house. Let us say you are buying a RM500,000 property, you will then need to prepare at least RM50,000 for the down payment in cash. Other than the 10% down payment, there are also some miscellaneous fees that you will need to pay upfront.

3. How to increase your eligibility?The simplest way to increase your eligibility to afford a house is to have your income increased. As your salary increases, your DSR will automatically reduce and you will naturally increase your chances of securing a bank loan. It is understandable that most people will think getting a raise or promotion is not easy, hence unable to afford a property due to insufficient earning.

Other than planning your budget early, you could also manage your debts by reducing them to increase your eligibility in securing a bank loan. Clear off your debts as fast as you can or go opt for a debt consolidation plan by consolidating your credit card loans and personal loan into a single personal loan with low interest in order to increase your eligibility. In addition, try not to apply for more credit cards so your DSR will not be affected when it comes to applying for a bank loan.

In conclusion, it is still possible to buy a house as long as you plan your finance accordingly. Most importantly, know what you can afford and always stay realistic. Stick to your budget so you will not end up in a financial debt in the future.

Undoubtedly, buying a property could be considered a huge investment. So, financial planning is really essential prior to buying a property. However, the quality and location of the concerned property should be taken into consideration prior to the investment. Investing in real estate without any knowledge could cost a lot to the investor. So, one should be very careful while investing in real estate.

My favorite tip in your article was when you said that raising one's income and paying off one's debt can reduce one's DSR. Aside from these, I believe that one way to plan for one's first property is to find a real estate agent to show different houses, from a simple one-story to a luxury single family home. With their help, a person can earn the right amount of money to buy their own place to stay.

Awesome and realistic advice! Buying a house is indeed a huge undertaking, so you need to plan ahead and stick to that plan until you get all your debt paid off, this is not an easy mantra to follow. When I got my first job and started earning, I immediately started house hunting, instead of wasting my money paying rent, I'd rather spent it on something I can own in the future.